By Mark Aesch, TransPro CEO
In the public transportation industry, the question most frequently asked after “what is your ridership?” is ” what is your budget?”
Just as the focus has shifted from measuring volume to balancing ridership with service quality and customer satisfaction, so too should we move beyond simply evaluating budget size and instead examine the percentage of funding allocated directly to service delivery on the street.
A frequently asked question in the not-for-profit industry is what percentage of total donations wind up benefiting people that are served by the organization? It pays to emphasize direct allocations. Organizations that earmark 95% for benefits vs bureaucracy are oftentimes most favorably viewed for financial support.
The public sector industry could benefit from the same mindset. In fact, we recently worked with one community where they were inspired to reallocate nearly 10% of their overall operating budget from administrative spending to actual service on the street. Think of the enormous impacts this will have on access to employment and quality of customer experience.
To successfully adopt a mindset of maximizing service on the street, three fundamental factors must be in place:
- Clarity of Outcomes: If the goal of your agency is regulatory compliance and getting a 27/27 in your next FTA Triennial Review, then you might want a much larger administrative spend. If, however, your Board has endorsed customer experience, access to jobs, and community value as measurable outcomes, your agency will likely prioritize service vs simply spending. It is critical to understand desired outcomes.
- Customers vs Capital: If the objective of your agency is to maintain a State of Good Repair of your rolling stock vs delivering an industry leading Net Promoter Score, then you would likely spend more money on administration, parts inventory, and maintenance. If, however, your agency cares more about the people who use the service than the buses and trains themselves, maximize your spending on happy customers.
- Maximize Investment: Much like a not-for-profit reduces overhead costs to maximize mission achievement, shifting mindsets to maximize the resources an agency is provided would be well served to prioritize.
Much like not-for-profit organizations strive to maximize the impact of their resources, public agencies are not inherently underfunded—they are funded to a given level. The essential question is how wisely and effectively those allocated resources are utilized.
So what’s your choice – maximize benefits or bureaucracy? One community has answered that vital question with a resounding BENEFITS. As of January, 10% of its operating budget previously allocated to administrative overhead has been redirected to service improvements. The result is undeniable: tens of thousands of additional service hours now directly serve the community and its customers. Ultimately, the answer must always center on delivering service.
